liquid funds are not designed for maximum returns. they are designed for stability and quick access. but returns vary across funds and across time periods.
different funds lead at different time frames. a fund that tops the six-month chart may not be the same as the one leading over three years. looking at more than one return period gives a fuller picture .
six-month returns. axis liquid fund leads
axis liquid fund delivered 3.4% returns over the last six months, according to ace mf data on july 26 . edelweiss liquid fund and franklin india liquid fund-super inst followed at 3.4% as well . axis liquid fund has the largest corpus among the top five at ₹44,865.9 crore .
the ranking considers only schemes with assets under management of at least ₹1,500 crore . the six-month returns for the top five funds are almost identical.
| fund name | 6-month return (%) | aum (₹ cr) |
|---|---|---|
| axis liquid fund | 3.4 | 44,865.9 |
| edelweiss liquid fund | 3.4 | 12,258.5 |
| franklin india liquid fund-super inst | 3.4 | 2,915.5 |
| sundaram liquid fund | 3.4 | 6,365.2 |
| dsp liquidity fund | 3.4 | 19,370.7 |
three-year returns. bank of india liquid fund leads
the leadership changes on a three-year basis. bank of india liquid fund delivered 7.0% cagr over three years, ahead of axis liquid fund at 6.9% and franklin india liquid fund-super inst at 6.9% . bank of india liquid fund was ahead of its benchmark by 0.1 percentage points on a three-year basis, with the benchmark returning 6.8% .
it was also ahead of its benchmark by 0.3 percentage points on a one-year basis, with the benchmark returning 6.0% .
| fund name | 3-year return (%) | aum (₹ cr) |
|---|---|---|
| bank of india liquid fund | 7.0 | 1,720.0 |
| axis liquid fund | 6.9 | 56,167.8 |
| franklin india liquid fund-super inst | 6.9 | 3,721.6 |
| dsp liquidity fund | 6.9 | 19,019.2 |
| invesco india liquid fund | 6.9 | 14,988.6 |
one-year returns. franklin india leads
franklin india liquid fund-super inst delivered 6.4% cagr over the last one year, according to ace mf data on july 21 . axis liquid fund and edelweiss liquid fund occupied the next two positions with returns of 6.3% and 6.3% .
franklin india liquid fund-super inst was ahead of its benchmark by 2.0 percentage points on a one-year basis, with the benchmark returning 4.3% .
| fund name | 1-year return (%) | aum (₹ cr) |
|---|---|---|
| franklin india liquid fund-super inst | 6.4 | 2,915.5 |
| axis liquid fund | 6.3 | 44,865.9 |
| edelweiss liquid fund | 6.3 | 12,258.5 |
| dsp liquidity fund | 6.3 | 19,370.7 |
| uti liquid fund | 6.3 | 27,632.2 |
one-month returns. franklin and sundaram lead
franklin india liquid fund-super inst delivered 0.7% returns over the last one month, ahead of aditya birla sl liquid fund at 0.7% and nippon india liquid fund at 0.6% . sundaram liquid fund also leads on some one-month comparisons .
axis liquid fund holds the largest corpus among the top five at ₹56,167.8 crore .
what the pattern shows
the variation across return windows shows why rankings can look different depending on the period being considered . a short-term leader may not always be the same as the fund that has done well over a longer horizon .
axis liquid fund has the largest aum across most comparisons. larger funds offer stability and are better at handling redemptions. franklin india liquid fund-super inst has shown consistency across one-year, three-month, and one-month returns . bank of india liquid fund leads on three-year returns but has a smaller aum .
what to check before choosing
expense ratio. direct plans have lower expense ratios than regular plans. the same fund, same portfolio, higher return from lower fees.
tracking error. the fund should stay close to its benchmark. a fund with high tracking error will not deliver the expected return.
portfolio quality. funds with high allocation to aaa and a1+ rated instruments are safer. checking the fund’s holdings is advisable.
exit load. a graded exit load applies if redeemed within 7 days. zero from day 7 onwards.
frequently asked questions
1. which liquid fund has the highest returns in 2026 ?
it depends on the time frame. axis liquid fund leads on six-month returns (3.4%) . bank of india liquid fund leads on three-year returns (7.0%) . franklin india liquid fund-super inst leads on one-year returns (6.4%) .
2. are liquid funds with higher returns always better ?
not always. a fund with higher returns may have taken slightly higher credit risk. checking the portfolio quality is as important as checking the return.
3. why do returns vary across funds ?
returns vary because of differences in portfolio composition, expense ratios, and the yield to maturity of the securities held.
4. is a higher aum better for a liquid fund ?
larger aum funds are more stable and handle redemptions better. axis liquid fund has the largest aum among top performers.
5. should i compare direct plans or regular plans ?
compare direct plans. direct plans have lower expense ratios and higher returns. regular plans include distributor commissions.
